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tv   On the Move  Bloomberg  November 28, 2014 3:00am-4:01am EST

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he gears up for a similar debate at the meeting. crackdown. britain's prime minister will be dealt his plan to cut immigration in the u.k. up, what doesats it mean for markets and europe's future? what we are watching this morning. equity markets in the u.s. closing early today at 1 p.m. eastern. it is thanksgiving weekend. markets here in europe are just opening up. a little bit of a mixed bag. lets check with caroline for a picture of this trading day. we are all when focusing on deals. in tesco's people being surrounded by police because of the scuffles going on across the country. interesting it is the day the u.k. consumer confidence actually fails to improve, missing analyst estimates, worried about the economy. we see the ftse 100 off by a
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quarter of a percent. france also trading lower. we are going to wait for the dax to ramp-up in terms of equity trading. we're going to focus more on brent. let's focus on commodities more than equities. this is where big moves are going to be coming. crude oil is down by 9/10 of a percent. we are at $71.96. yesterday it fell by more than 6%. why? opec's decision to keep prices steady. they are not going to be reacting to the downward spiral in prices, losing more than a quarter of oil's value. could this make some shale projects in the united states lose money? overall, we are seeing big moves in oil. also, keep your eye on the currencies this morning.
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the euro is off. this is about the hope for more stimulus. will we see it? we had german inflation really showing the problem mario draghi is facing. the german inflation rate in november declined. we are likely to see the eurozone fall lower today as well. want to see more stimulus come from mario draghi. the president of the ecb said he could expand asset purchases to stave off deflation. >> let's keep an eye on the yen. the japanese yen is falling against the dollar to the tune of 4/10 of a percent. we have lack of inflation. the yen is weakening. we saw inflation down. we sell retail sales as well. more is needed to come from the bank of japan and the leaders of japan. monetary stimulus is needed. they want to see something coming from the government. japanese trading.
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we see the yen becoming that much weaker. that is a picture of what is going on in the assets. they could be selling some spanish assets. >> caroline hyde with the latest. let's get an investor stake on the top market stories. head ofoined by the investors across bridge capital, where he helps oversee more than $2 billion in assets. good to have you on the program. when you look at the world, it doesn't seem very say. inflation is a concern. deflationking at spiraling out of control helped by a crash in oil prices? >> i would say if you look at the global growth point of view, the things we are worried about, disinflation is helping gdp growth.
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there comes in inflation point where it could become a spiral of deflation. for now i see it gives a good we will talk about europe a bit later. if you look at terms -- in terms of gdp growth we have 3.9. the central bank will be -- low easy.ion will be there are no runaway rates that need to rise. they don't die of old age. high inflation or leverage, those are not there at the moment. it looks he nine. i think the rally will continue. >> if you look at the oil praise, that oil price, could it drop. i know it is positive in terms demand willcause
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grow because it is cheaper, but it feels bigger than that. >> now opec is saying the onus is not on them. almost more than 80% of shale gas exploration can continue, even if oil is $42. you might have downside. there will come a point where maybe they will come back. they might do a cut at some point. >> you think it is a good thing the oil price goes down. barrels, even$60 55, 55, what does it mean for your investment strategy? is there a point where below that level you start to say, i
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am concerned about what the future holds? >> if it is a precipitous fall you say, where is it going. we are seeing a benefit. it is a big market index. it will become precipitous, keep falling, and we have other things to worry about. i am sure we will have a supply cut and it will get stabilize. >> what is your take on japan? showing itigures are is a challenge for the prime minister. >> i believe we will have to do more. higher.st going to go abe said we're not going to raise now, but we are going to raise it at a later date.
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he is not going to risk the .ecovery that was going on >> is this monetary policy going to help japan? >> they don't have any other option. the more important thing for me is emerging-market growth has to come. they start getting the revenues from there. the whole emerging-market consumer can start consuming, and that can start benefiting japan as well. if you look at the japanese , they havenufacturer 300 stores in china. >> thank you so much. we will look at some of the stocks in the move, and we will look at europe next. for bp, downicture
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1.6%. the hp billiton also exposed to the oil majors, down 2%. hp billiton also exposed to the oil majors, down 2%. ♪
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>> welcome back. i am francine lacqua, and this is "on the move." let's turn to the u.k., because
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prime minister david cameron will lay out a plan to cut back immigration to britain. as to cameron will say europeans -- mr. cameron will say europeans arriving should not receive unemployment benefits and should be removed if they don't find work in six months. fellow leaders don't agree with the plan. for more on what it means for the markets in britain's place in europe, let's bring in the manager of investment across bridge capital. if you look at the rhetoric and the u.k., it is more belligerent -- in the u.k., it is more belligerent against the eu. as a player in the market, how do you price that in? seen a u.k.e have recovery, a lot of it driven by the u.k. housing market, which is coming under attack. when we see prime minister cameron talking about immigration, it seems he is falling rather than leading.
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i think this government has done a great job. even how the polls are showing i am not sure how this government gets reelected. -- given how the polls are showing, i am not sure how the government gets reelected. we have seen the labor be far free market. it's difficult to say, but i have a feeling we won't see this coming back. thehat does it mean for u.k. factor? ?hat happens next is the political spectrum influencing your investment strategy? >> they are very much an overseas player as well. it is the small-cap and mid-cap, but it is a u.k. company. we look at rio tinto, and we saw they are not going to spend more . i am more interested in picking
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stocks in the u.k., so i want to look at the longer stocks. falling they will not make the capital expenditure. you have to start going into stocks rather than to buy the whole index. concerns. be for the u.k. i am concerned about stocks. it could be energy stocks are mining stocks which have been oversold. >> you are overweight. this is ahead of the european central bank. are we expecting much next week, or are we going to wait to see how much money -- how much cheap money the banks actually took? >> we have seen time and again. there is little consensus in europe. draghis druggie down -- down even if he wants to act. opinion is even if they are
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not going to do a great deal, it will help. there will be a sovereign qe. >> when? will it be too little, too late? >> i think in q1. he has made it very clear. theet the number today and feeling it may be that. >> qe with or without the help ?f germany >> ecb has a mandate to stay at inflation of 2%. doesn't mean it has to be negative inflation and only then you act. there is unanimously in the council as we know now. i don't think you can buy more than 200 billion anyway. if they want to expand the balance sheet by one trillion, they will have to buy sovereign qe. it will be based on german bonds . that should be acceptable. >> doesn't mean you are
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comfortable with the eurozone and their handle on deflation -- does it mean you are comfortable with the eurozone and their handle on deflation? >> look at the reasons. you had a strong euro. you had a contrasting balance sheet. you had austerity in some form. everything wasn't there. you had a bad run. sometimes it is about where you are placed and where the growth can come from. >> i would argue there is so much political play, forces, and we may see right wing voting in spain, italy, and greece. if we don't have reforms in the next year and a half from the government, we go back to the situation from three years ago where it is the ecb during the heavy lifting. >> i think political risk is in europe always. we have the elections, many elections. always there. is
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that's a big risk. if someone says, i don't want to be an the e.u., and i want to change my policy, but we have seen some signs in italy. those are big changes. that doesn't get reported widely. big crisis, had a so they haven't done reform compared to what you had in other places. will they wait for a crisis to have reform? i think they are doing some reform. they are very clear they have reform. have a productivity problem. i guess productivity is the main problem apart from germany. it will take years if not decades to address it. >> true. there is high employment, balanced budget, and it's great. as druggie has said, he is not making policy for one country -- as draghi has said, he is not
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making policy for one country. germany will have to fall in line. flag thank you -- >> thank you very much. let's check on the price of oil. here is a picture, down 10%, hitting the lowest level since 2010. check out the oil and gas index. that has been down 3% this morning. after the break we hear from one forhe voices inside opec insight on why they did not cut production. -♪
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>> welcome back. let's bring you up to speed with some companies on the move. rio tinto has cut spending to boost its dividend. the second-biggest miner delayed plans to approve a $1 billion iron ore mine to make it on the promise the company would become the cash machine for shareholders. -- to make good on the promise the company would become the cash machine for shareholders. club med has posted a net loss of 9 million euros with .perating profit falling 4.8% bookings are down 12% of the company was hit by weaker demand in europe and africa. club med says net income is likely to be positive next year. the breakup of google is unlikely to happen, no matter what lawmakers say.
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that is the message from european ministers and officials. members of parliament posted in waking up from other services. they did not mention google by name. from companies to commodities, let's get back to one of our top market stories. opec decided not to cut output. some members are using the price were to challenge non-opec members. the chilcote caught up with nigerian oil minister after the decision. >> can you give us your view of the decision and a little bit of a sense of the deliberations? >> they were very serious. hasy economy in there [inaudible] however, maintaining the level sharphelp minimize a
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decline. we will watch and see what happens. >> what about venezuela's argument the cut is necessary? >> not only venezuela. of economiesber believe that. i think we would come to consensus because that is the best they and the best thing for the global market. sense that at these levels american crude producers can be shaken out of the market? >> and not sure they can be shaken out, but i do think over the next few months and years -- i am not sure they can be shaken out, but i do think over the next few months and years they will come to some equilibrium in terms of the prices and that sooner or later they will [indiscernible] willxt time around there be a cut? >> it depends. toc and non-opec has begun share the burden.
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>> that was nigeria's oil minister speaking to ryan chilcote in vienna. according to a delicate, she will be named president of the organization next year. for more on the decision, we are joined by philip. way to have your own -- to have you on the program. -- great to have you on the program. why did he decide to not cut? .> the u.s. produces more oil for opec it is important not to lose market shares in this sense. >> would you say there are now three players? there is opec. there used to be the cartel, but they lost control of the market. you have the u.s., but you have russia and other non-opec umbers outside the u.s. are they all comparable in strength? >> it's difficult to say. the u.s. is a newcomer. shale is different from
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conventional oil production. it's much more flexible. it can react to prices more flexibly. the drilling of the shale oil goes much quicker. you can move around more flexibly and go to more prolific acreage if prices are lower, or marginal plays in jail if prices are higher, so you can produce more or less. they are more flexible, whereas almost all other oil producers can't move as quickly. you have offshore projects or arctic projects that are much more costly than shale oil, and they are more long-term. they will need a higher oil but they won't react on the short movement of the oil price. if the oil price stays at this level for the next year, some of these conventional long-term
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projects will be harmed or may be postponed. >> they may not be viable. a decided notth to cut and the prices have gone down. winners been the main and losers? >> i think the main losers are the members who are dependent on the oil price. russia at the moment it is difficult to say. russian production is not very expensive, at least the existing production. the development of new fields in the arctic and eastern siberia and these places, this might well be postponed. >> thank you so much. votes in switzerland. we will be live in zürich to get a perspective of the three referendums. all of that is coming up. we have a lot of breaking news. we will be hearing from david cameron. this is the picture on the market. a little bit of a mixed bag. the dax is pretty much flat, but
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there are declines across the board. you can see the ftse down. down by 0.3%. it is all about the oil price. they decided not to cut reduction of bonds. this is part of the economic story. bonds are rallying, sending yields to record lows. chinese shares suggesting a lot of central banks will increase stimulus. next week there is the big ecb day. that will depend a lot on the inflation figures we get a little later on. exit the e.u.? will they hold onto their power when the election comes in spring of next year? that is the million trillion dollar? it's want to know. before we discussed that in the next half-hour, you can find me on twitter. i will see you very shortly.
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♪ . .
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>> welcome back to "on the move." i'm francine lacqua at bloomberg headquarters here in london. the dax down fro 0.1%. the ftse down 0.4%. now let's get stock specific with anna edwards at the touch screen. what are you watching? >> the oil story. let's have a look at examples of where sweerg the lower oil price still continuing to affect equities. we got the news from opec yesterday. that doesn't mean we're not seeing reaction today. we are.
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you can see some of those stocks being picked up today. the moves lower in the oil businesses, oil companies, energy companies, oil services businesses. anybody exposed to that oil price being touched by this trend. 9.7% weaker on premiere oil. across the second sector some weakness coming through there. the other side is the uptick in the airline stocks. here is one example. 3.7% higher for luff transa. - lufthansa. a slightly different story for you here. club med. an interesting story. they gave a full update and reported a net loss. we have some extraordinary items. ey took hits on nonstrategic
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holiday villages. getting out of some of those businesses cost them money. they say it is positive they will make a net profit in 2015. really interesting comments coming through on the state of the global economy. they talk about an economic crisis in europe and especially in france. clearly they face their issues in france and in belgium and in parts of africa. the geopolitical concerns clear to see for that business. those are some of the stocks on the move right now. back to you. >> thank you so much. anna edwards with the latest stock movers. crude has fallen lower after opec decided not to cut oil output. they will keep production targets unchanged despite a dramatic fall in prices this year. he decision not to cut
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production puts u.s. shell drillers -- china has passed japan as the world's second argest stock market. meanwhile inflation in japan slowed for a third month and retail sales fell more than expected as the economy continues to struggle from a sales tax hike. david cameron will lay out a plan to cut inflation. he will propose that europeans arriving in the u.k. should not receive welfare benefits and should be removed from the country if they don't find work within six months. of course immigration laws are being focused. votes on the gold hoard and
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taxing wealthy foreigners are also on the ballot in switzerland. an economist joins us now from zurich. great to have you on the program. how will the vote actually end up? >> the latest serious opinion polls show that all three initiatives will get a no vote. it will be rejected by the people here. >> let's say we don't get a rejection. what is your main concern? what is the one thing that actually will make economists sit up and take a listen? >> the most market relevant initiative will be the gold initiative. it would require the national bank to hold at least a 20% share of gold reserves. so in the extreme case, it would
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mean that they hold 100% gold because they are not allowed to sell gold they once acquired anymore and that is the main flaw of the initiative. this would be not good for a flexible framework which the central bank requires. >> if these initiatives get accepted because you're right, the polls for the moment indicate actually rejection, however there are still so many voters it seems that are undecided. if these initiatives get accepted, is it going to be a turning point in the way the economists in the market see switzerland? >> yes. at the beginning of the year, a yes for restriction of immigration with flexible quotas. nd now the eek pop initiative.
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-- echo pop initiative. levels of one or even above %. that is a u turn. of course you have problems with overcrowded public transports and streets and highering rents and house prices, but if you want to restrict immigration, which is understandable with such a harsh quota, it doesn't come with a free bunch, businesses thinking about relocating and doing investment in other cups. >> in terms of where you see risk in -- in other countries. in terms of where you see risk in switzerland. it basically would mean that is that it is so much more difficult to defend the franc. >> i don't agree for the foreseeable future. if the gold initiative is
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accepted then the national bank has five years time to fulfill the the quota and there is also the option that it else is. a huge reserve. that it doesn't have to buy gold so it has time and flexibility. in the short term, they still have the full firepower to defend the camp. >> all right. you disagree. you say that although this -- the gold initiative gets passed, you think the swiss national bank still has the power to depend the cap on the swiss franc until when? >> definitely they have. in the short-term they don't have to buy gold so they can concentrate on buying euros and anything -- any case, we think only re-emerge ent of the euro -- re-emergeant to have euro debt crisis.
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also safe haven flows would be a danger for the camp. not as -- the election or the initiative result on sunday. >> all right. we'll see. we'll wake up possibly on monday morning to a brand new switzerland. we'll have to find out. thank you so much. coming up, building profits at lego. we talked to the c.e.o. of the iconic toy company about their outlook for the holiday season. ♪
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>> welcome back. i'm francine lacqua here in london. this is "on the move." will it be a happy christmas for oy company lego? rong growth in all regions buoyed by products exceeding expectations. thank you so much for joining us. we're ramping up our festive season coverage. how important is christmas and the festive season for you? >> it is very important. it is almost half of the full
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year sales in the half week leading up to christmas so it is an important time for us. >> in terms of revenue, almost half? in what markets are you more popular? >> well, actually the lego brand is enjoying a truly global success. we have seen double digit growth rates in all of our three market regions. the americas, the europe and asia and africa. it truly sl a global success. >> we had a survey earlier this week saying leg seo the most popular holiday gift for boys and number six for girls. what are you doing to address this? is it just the way it is or are you taking active steps to this? >> i think thelogue brand has been attractive to boys and girls. in the last five years we have introduced more and more theems particularly relevant to girls and this-year we're seeing very
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strong growth in products that are attractive to girls. i think we'll see ourselves climbing that list you mentioned. >> are you planning on -- any new products this next year? >> definitely. every year about 60% or 70% of our product portfolio is new. we can re-invent what we have done for leg o. we continue to rean hour portfolio. >> of course one of the most desired -- i have done a lot of research. i have boys. this sometimes is -- when you speak about what girls want. we have a survey that in u.s., 1/6 of girls want anything related to "frozen" and you had to delay the introduction of the frozen castel until july 2015. why the delay? >> i think what we're finding is the lego brands
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is popular. we havelogue friends and princesses for girls. creative sets and lego city are very popular. we have a strong offering. "frozen" is popular with some toy manufacturers but it is not a major concern for us. >> what do you predict will be your most popular item this christmas? >> i think actually the wholelogue brand is going to be sitting in a strong position. we are seeing growth across the portfolio, technique for the -- the lego movie has been very popular and also our product related to the lego movie is very popular this year. >> can you give me an indication how orders are looking for christmas? o people start ordering now? >> yeah, i can't unfortunately
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-- unfortunately i can't share any numbers but i can say that of course scomplers placed a lot of orders already. retail customers need to buy early in order to bring the products from their shipment systems out into the stores. season is almost already over. of course we continue to manufacture, to demand but we have shipped the majority of the good that go into the christmas trade and we're very positive about the outlook for this year. >> do you expect to actually outselma tell? -- outsell matell? >> i'm not concerned about that. i'm concerned about delivering the best children's play all over the world. we want to be the best, not about the biggest. it is about delivering the best creative high-quality play experience. >> you also mentioned lego the movie. which was a huge success. is there going to be a sequel and when?
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when is it coming out? 2017? 2018? >> it is a decision that rests with warner, but there is a decision to make a sequel possibly slated for 2017. we're very much anticipating that there are going to be other s out there in future years. i think ts very exciting for us but i also need to stress that it is companies like warner who produce these films and we're of course happy to try and influence the content. >> on the program, we talk a lot about the -- 3-d printing. do you expect to capitalize on that? it would be easy or would it? to have a 3-the printer to print some of the legos. are you thinking of it? are there partnerships coming up on this?
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3-d printing is -- we have used it in-house. we don't see a potential within mass manufacturing but we see a potential within making certain tools for manufacturing processes and so on. in terms of product acknowledging, we are a bit concerned because we comply with the highest safety standards worldwide including the e.u. safety director which is very big on chemical substances and the potential effects and reproductive effects. we're looking watching what can be done and how will the technology without compromising this impeccable and world famous lego quality. >> black friday started in the europe. it is now coming to europe. you have a lot of countries in the emerging markets doing more and more. what does it mean for lego? do you have a worldwide strategy
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for black friday? >> for our case, it is still very much a north american, particularly a u.s. phenomenon. it is true that it is spreading to other countries. we view it as a major retail promotional event. we always want to work positively with our retail partners and we of course try to support them in having an attractive offer and having their shelves full of product when consumers are out there. we're also seeing online it is becoming a major event and i'm sure it is going to be that, particularly in the u.s. and in our major key markets around the world this year. thank you so much for joining us and yeah what a greath product. logue group c.e.o. and president. sticking in the retail space, black friday used to be a very american event when shoppers went wild in the shops the day of thanksgiving. let's head to caroline hyde. fights breaking out in stores
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but in the safety of the online business. >> i am protecting myself while police are being called out to various it's coast across the k. because scuffles are -- c.e.o.s across the u.k. because of scuffles. taylor swift was rocking this earlier this week. currently we are seag peace inside. it is going crazy. they have 20% off. it is the biggest fashion online only retailer in the u.k. you have some surges going on online as people as far as asia, australia, america, in europe, across europe, are buying online in a frenzied fashion trying to get hold of all of these deals. when you span this out to the u.k. in general, francine, to give you a sense of scale, how
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people are grabbing hold of black friday with both hands, 1.5 billion pounds being spent. one million every minute being spent. a second just went. 17,000 was just spent online and offline in the u.k.. we are seriously adopting black friday. >> it wasn't me. i didn't buy anything it is a great little number that you have there. perfect for dancing season. caroline brings us essex collusive interviews for -- exclusive intersfrures black friday. opec decided not to cut production yesterday. premiere oil on tv biggest loser on the stoxx 600. ♪
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>> welcome back to "on the move." i'm francine lacqua here in london. "the pulse" is coming up. we'll be joined by guy johnson very shortly. this is a look at the markets. a lot of focus on oil after opec decided not to cut production yesterday. that means of course the prices of oil have been sliding further and further in terms of what
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european stocks are doing. energy stocks are the biggest decliners. b.h.p. ke b.p. billiton. "the pulse" is coming up at the top of the hour. guy johnson joins us. it is all about immigration and the u.k. and what david cameron has to spafmente >> he will be speaking in the midlands a little bit later on m we'll take that speech live. this has been a speech that everybody has been waiting for for quite sometime. he has been deciding when to do it. where to do it. how to do it for quite a while. i think he had his hand forced and he needed to take action. what we're going to hear later on is probably not him taking a ot at angela merkel or jean-claude juncker but talk about those trying to take advantage to have welfare system.
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>> he is following. he is trying not to lose votes. > this is a reactionry policy. the criticism is definitely focused on the fact that he is too reactive. that he is not leading. he is following. pushing him towards confirming maybe and we may get this today that he will actually campaign for an exit if the conservatives were to win a mandate in the general election next year. >> what we're expecting to say. we don't know, of course that speech will be taking live is in 35 minutes from now. the main gist is i don't want benefits to -- new immigration. new imgrants here in the u.k. if they don't find work in six months and tame if the e.u. doesn't allow me to do this then we are out? >> i don't think you can draw the line necessarily between the two. what he may talk about is the
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wider renegotiation that he is hoping to have with brussels. >> will there be a threat? >> crpping there will be. how explicit that threat is. he didn't want to have to campaign on the side of an exit but it is looking like he will end up doing that. obviously that will change. the conversation vourneding the e.u. but we're in a situation where he is not going to directly challenge today the idea that you should have free movement of people in europe. that is fairly critical. merkel and juncker will be happy not to have him a do that. >> we have a great guest and then that speech we'll take live. fore he head to break, let's check the energy companies. pec decided not to cut output.
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we'll be back next with a special edition of "the pulse." ♪
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>> cameron's crackdown. the british prime minister expected to introduce new hours in curb immigration. >> france and italy may face punishment for their rule-busting budgets. >> and shopping stampede. black friday comes to the u.k. we'll talk with one british etailer hoping to cash in. good morning, everybody. welcome. you're watching "the pulse".
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